Buyers, sellers and the rumor mill

By Jack Crittenden, 9/27/2010

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Acquisitions activity appears to be heating up.

ClubLink acquired the WCI golf portfolio and has expressed interest in more acquisitions. Crown Golf recently placed eight of its courses up for sale. ClubCorp acquired the Country Club of the South and has hired a new director of acquisitions.

Now we hear that Toll Brothers is positioning itself to acquire golf courses, and CB Richard Ellis reports that the Crescent Resources portfolio of eleven courses is expected to sell soon to three different buyers. Sales activity may be slow compared to the number of courses that probably should sell. But properties are moving at a faster pace than a year ago — and, more importantly, there appears to be far more buyers. But, as brokers and financiers warn, there is little, if any, financing available. And that means that the buyers need cash — 100 percent in some cases.

Experts don’t expect finance money to return to golf for a few more years. But that does not mean deals will be at a standstill. It appears there are more and more opportunity buyers positioning themselves for the market.

We have read rumors about potential Wall Street and private equity funds entering the market. We have also read the rumor about one major player seeking to acquire another major player. We have looked into these rumors and have found that in an opportunity market like this, dealmakers will look at many different options and float ideas around. Even if they begin to actively investigate an idea, the chances of it moving forward are still slim.

Suffice it to say, there are several golf industry veterans hoping to land some private equity money or to expand. Inevitably, some will move forward. The question is when? While rumors can be enticing, reality is that we are likely a year or two away.